Trading Diary: Switch, Inc. IPO dazzles in dull Friday markets

WASHINGTON, October 5, 2017 – In Thursday’s late column, we described to you the weird and unfair IPO offering for server farm company Switch, Inc. (SWCH) and why we were going to put in for shares anyway, since it looked like a decent short term bet.

In fact, we did put in for 200 shares at the offering price of $17, when the offering priced above its range – usually a good sign that there’s interest in the offer.

Unfortunately, Switch’s IPO shares were even hotter than they looked. As a predictable result, we didn’t get any shares at all, making the contents of yesterday’s rant something of a moot point. SWCH is currently trading frantically around the $24 per share range, a healthy gain at this point of approximately 40 percent. Nice work if you can get it.

As we’ve said many times before, if any issue gets hot, however many shares a given brokerage gets, they go first and foremost to the brokerage’s wealthiest clients as sort of a “gift” for staying with the firm. The rich clients generally flip the shares for a fat, very short-term profit, and that’s that.

Little guys rarely get in on good stuff like this for that very reason. It’s unfair, irritating, and it happens all the time. Unfortunately, it’s also perfectly legal.

So we’ll fume about missing out on those SWCH shares, as much as we dislike the greed of its owner (voting rights are ruthlessly diluted by other more favored classes of stock). Then we’ll move on. It’s just another reason – one of many – why the rich consistently get richer than you and me.

Biographical Note: Dateline Award-winning music and theater critic for The Connection Newspapers and the Reston-Fairfax Times, Terry was the music critic for the Washington Times print edition (1994-2010) and online Communities (2010-2014). Since 2014, he has been the Business and Entertainment Editor for Communities Digital News (CDN).
A former stockbroker and a writer and editor with many interests, he served as editor under contract from the White House Office of Science and Technology Policy (OSTP) and continues to write on science and business topics. He is a graduate of Georgetown University (BA, MA) and the University of South Carolina where he was awarded a Ph.D. in English and American Literature and co-founded one of the earliest Writing Labs in the country. Twitter: @terryp17